The House Retirement Committee, which has HB52 on its agenda for Thursday (May 2), ought to approve it and send the legislation to the full House.

Firefighters and the city are backing different versions of bills to change the makeup of the pension board, increase the percentage firefighters pay toward retirement and make other changes. But those bills would only come into play if the pension system remains a state entity, BGR says.

That makes no sense given that the city, not the state, has to pay firefighter benefits. HB52, which is backed by Mayor Landrieu, offers the best chance of wholesale change.

To be sure, firefighters provide a vital public service and put themselves in danger to do so. They should be able to count on a decent retirement. But the current system is overly generous and excessively expensive, which is not fair to New Orleanians.

"The bill offers an opportunity to create a governing board that better balances the interests of the city's taxpayers and firefighters, and to dial back the system's excessively generous benefit structure," BGR said in a report this week. HB52 "will not get the city out of its current dilemma, but it offers hope for stopping the bleeding."

In 2012, the city owed $63.6 million for obligations related to the firefighters' pension, which equates to 13 percent of general fund revenues, according to BGR.

The Landrieu administration is appealing a judge's order to pay firefighters another $17.5 million to cover pension fund obligations for 2012 -- which would be on top of almost $49 million, including debt payments, in the city's 2013 budget.

The "staggering cost has consequences," BGR said. "It means less money for crime prevention, blight reduction, street improvements and a host of other important city services." That list could include the Fire Department, which firefighter representatives say is understaffed.

The firefighters' pensions aren't financially healthy, either. The original pension fund, which covers firefighters hired before 1968, has $157 million in unfunded liabilities. The fund covering firefighters hired post-1968, called the new fund, has only enough assets for 40 percent of its benefit obligations, BGR said. That figure should be at least 80 percent, pension experts say.

There is no quick fix for the pension problems, but it is imperative to begin to stabilize the system and bring benefits in line. HB52 would allow that process to start. "The bill offers an opportunity to create a governing board that better balances the interests of the city's taxpayers and firefighters, and to dial back the system's excessively generous benefit structure," the BGR report says.

Currently, any changes to the pension board or benefits have to go before the Legislature because the system was created under state law. That makes it more difficult for the city to make needed changes. An attempt to revise the pension system got nowhere in last year's legislative session.

Lawmakers need to act this year. The status quo is simply unacceptable.

The fund's benefits are the most generous by far of 19 public pension plans in the metro area reviewed by BGR. Firefighters can retire after only 12 years and get a lifetime pension of 30 percent of their highest-earning years. After 20 years on the job, they no longer have to contribute to the fund. At 33 years, they get a full pension for life. City firefighters pay far less into the pension fund than their counterparts across the state, BGR says. BGR President Janet Howard has said that benefit structure is "off the charts."

The overly generous benefits combined with bad financial decisions by the city and the pension board created a mess.

In the early years of the pension, the city put no money aside to pay benefits and initially didn't require employees to contribute anything. In 2000, city officials made a bad situation worse by plowing $171 million in bond proceeds into the stock market in hopes of a big return. The market tanked, and the trust that was supposed to cover benefits is out of money.

The pension board has made bad investments, too. The board put $15 million into a Cayman Islands hedge fund whose manager has been accused of running a pyramid scheme. The board has demanded its money back but has gotten nothing. Just a year ago, the fund had a staggering $140 million tied up in real estate investments, which took a hit in the 2008 housing collapse, losing nearly $30 million in market value.

As BGR put it, "What's done is done. No one can reverse the series of errors that have led to the current pension debacle. But lawmakers can take actions to put the Firefighters' System on the right path." That should start with the Retirement Committee.